Relying on his framework of the four modalities of control that he used in Code, Professor Lessig explains how the law, markets, norms and architecture together exert influence, and that depending on your policy objectives, these four forces can be complementing or conflicting. He suggests that together they form an “economy of influence” that we need to understand if we want to make effective policy.

He continues to explain “independence”, in the sense that something is not dependent on something. Independence matters, because it means that you try to find the right answer for the right reason, as opposed to doing so for a wrong reason you might be dependent on.

Independence, however, does not mean dependence from everything. Lessig reframes independence as a “proper dependence”. In legal terms, it means that a judge depends on the law for her judgment. So independence is about defining proper dependence, and limiting improper dependence.

Responsibility is the third concept Lessig goes into. He tells us about a case he represented in 2006: Hardwicke vs ABS. It was a case that focused on a series of events concerning child abuse, all perpetrated by a single person. The question that was raised: Who is responsible? Lessig makes the argument that responsibility does not lie with the individual, that this individual has no power to reform, and that this is pathological. Instead, he makes the case that responsibility in this case is all the people who knew about the wrongdoings, but refused to pick up the phone. Nevertheless, the focus of the law was on the one pathological person. Lessig suggests it is more productive to focus responsibility on those who have the power to make changes, instead of those are pathological and are not in a position to reform. He notes it is ironic that the one person who is least likely to reform is held responsible, while the one entity who could do something about it, was immune.

He raises another example of “responsibility” gone awry. He cites Al Gore and his book “The Assault on Reason”, and lambasts its narrow perception of responsibility. It focuses on former president Bush, arguably the man least likely to reform, and instead forgets those who could have done something about it, suggesting that they also have been critically responsible.

His argument is one of “institutional corruption”. What it is not: what happened with Blagojevitch; it is not bribery, not “just politics”, not any violation of existing rules. Instead, institutional corruption is “a certain kind of influence situated within an economy of influence that has a certain effect, either it 1) weakens the effectiveness of the institution or 2) weakens public trust for the institution.

He explains the system of institutional corruption using the White House. Referring to Robert Kaiser’s book “So Damn Much Money”, he argues how the story of the government has dramatically changed in the past fifteen years and how the engine of this change has been the growth of the lobbying industry. He illustrates this with numbers: Lobbyists pay with cash which members use as support for their campaigns. The cost of campaigns have exploded over the years, and subsequently, members have become dependent on lobbyists for cash – he cites that lobbyists make up 30-70% of campaign budgets! This is not new, he carefully explains, but citing Kaiser again, what is new is the scale of this practice has gotten out of hand. Members /need/ and take /much more/, becoming /dependent/ on those who supply. This is only during the tenure, but institutional corruption also needs to be understood as something after tenure: 50% of senators translate their senate tenure into a career as lobbyist, while 42% of the house do the same. This suggests a business model, focused on life after government, that perpetuates itself, and influential people who end up becoming dependent on this system surviving, both during and after their time in Congress.

He goes on to give example after example of institutional corruption. He mentions the important work done by maplight.org that tracks money in politics, who have shown that members who voted to gut a bill had 3x times the contribution from lobbyists than those who voted against. Simply put, policies get bent to those who pay. He cites a study by Alexander, Scholz and Mazza measuring rates of return for lobbying expenditures, who conclude that ROI is a whopping 22,000%! He again cites Kaiser, who suggests that lobbying is a $9-12 billion industry.

Why does this matter? It matters if it
1) weakens effectiveness of institution or
2) weakens public trust of institution

In the first case, he argues how lobbying can shift policy. He cites a study by Hall and Deardorff “Lobbying as Legislative Subsidy” on how the work of congresspersons shift as a result of lobbying. Imagine you’re a congressperson and you see it as your goal to work on two issues: one is to stop piracy, the other is to help mums on welfare. The line of lobbyists that will happily help you with stopping piracy is long, whereas not so many will help you with the latter – so work of the congressperson shifts, and thus work of Congress shifts.

Lessig suggests it also bends policies. Does money really not change results? Citing the Sonny Bono case of October 27, 1998, he shows how in copyright lobbying power had a powerful influence in getting the copyright term extended for another twenty years. Does this advance the public good? A clear no. Lessig backs this up by telling how in the challenge at the Supreme Court, an impressive line-up of Nobel Prize winning economists, including Milton Friedman, supported this and that it would be a “no brainer” to sign the support that copyright extension did not advance the public good. But he concludes that there were “no brains” in the House. An easy case of institutional corruption. There are two explanations: Either they are idiots, or they are guided by something other than reason. He suggests of course it’s the latter. It is not misunderstanding that explains these cases.

Lessig continues to explain how corruption can be seen as weakening public trust. He tells us about how the head of the committee in charge of deciding the future of healthcare is getting $4 million from the healthcare industry. Or how a congressperson ended up opposing the public option even though the majority of his constituency supports it. The idea is not that there might be a direct link between the money and the vote, but that if you take money to do something that is against the public interest, people will automatically make that link, and this weakens public trust. If you don’t take money and you go against the popular vote, that won’t reek of corruption.

Lessig goes on to discuss different fields: medicine and the healthcare industry, citing research by Drummond Rennie from UCSF that shows how there is an overwhelming bias in favor of sponsor’s company drugs. How there are 2.5 doctors to 1 detailer (a detailer being someone who is like a lobbyist for the pharmaceuticals, promoting the drugs to doctors, often giving “gifts”). How the budget for detailing tripled in the past ten years.

Lessig asks us: how can we find out whether these claims are true? Do detailing practices either weaken the effectiveness of medicine, or weaken the public trust for it? What would it take to know?

There is also the issue of “the structure of fact finding” that Lessig suggests is corrupt. Again, he argues we need to understand whether this is a process by which results are affected or trust is weakened. He cites how sponsor funded research can cause delay, and mentions the case of “popcorn lung”.

Lessig makes a strong case that we need more than intuition. That we need a framework or metric to know for sure. Because we all have ideological commitments, that we need to escape this in order to have a proper understanding of corruption. This is, in short, the aim of his new project: The Lab. It should be a neutral ground with a framework that determines whether and when institutional corruption exists, to develop remedies for institutional corruption when it exists. He sees the initial work having three dimensions: 1) data – necessary to describe influence and track its change; 2) perception of institutional corruption and understand how it has changed;
and 3) causation – what can we say about what causes what in these contexts in alleged corruption. Having this information, we can then design remedies.

By now I’m sure we’ve all heard about Congressman Joe Wilson’s (R-SC) outburst during President Obama’s Health Care speech on Wednesday. After Obama claimed that his bill would not cover illegal immigrants, Republicans en masse erupted in murmuring. That’s common during a joint session of congress. Then, after they’d quieted down, Wilson took the opportunity to shout out “you lie.” That was.

Wilson issued an apology in less than an hour, probably after his colleagues took him aside and politely explained that this made the party look even worse than protesters showing up to town hall meetings with misspelled signs and assault rifles. But of course, in 2009, the fun doesn’t stop there.

Much like Michele Bachmann (R-MN) before him, Wilson essentially volunteered to be the target of progressive mobilizers and activists. DailyKos and other political blogs immediately launched an ActBlue fundraising page for his congressional challenger. The Progressive Change Campaign Committee sent out an e-mailer to their over 200,000 members with a link to an e-petition calling for his censure. They’ve already gathered over 30,000 signatures and raised $19,500 to fund the short-term campaign effort. Someone anonymous blogger decided to take a more comedic route, setting up a phrase-generator for the web address www.joewilsonisyourpreexistingcondition.com At least within my various social networks, that one went viral. Every time you click on the page, a different Joe Wilson-phrase showed up, all of them offensive (ex: “Joe Wilson peed in your soup”). At the bottom of the page is the tagline, “you dissed America, we’ll diss you right the f*ck back” and a link to his opponents ActBlue page.

As with the Bachmann episode (which I wrote about for the YouTube conference… I’m waiting to hear back on the Revise&Resubmit suggestions; it will hopefully be published in a special issue of JITP), Joe Wilson is only going to be in the media spotlight for a few days. Maybe he’ll be censured by Congress, I don’t know. But by Monday, he’ll be a punchline. It’s tempting for critics to therefore dismiss the blogstorms, YouTube clips, epetitions and twitter retweets as just a bunch of noise, signifying nothing. That would be a mistake though. It’s a bunch of noise that signifies one, very important, thing.

It signifies money. Rob Miller (Wilson’s opponent) raised $614,487 in the 2008 election cycle. In the past 36 hours, via ActBlue, he’s surpassed that with $768,006. Wilson has launched his own counter-fundraiser, and is touring the Fox News and talk radio circuits to promote himself. So far he’s at $200,000. Charlie Cook has upgraded the competitiveness of the race as a result.

Will it make a difference in the end? Hard to say. Wilson won by 10 points in 2008, a year when Democratic motivation was at an historic high. 2010 will likely be the reverse. All the youtube clips, blog posts, and activist ridicule in the world won’t knock a Representative out of his seat if his district is conservative enough. But money, particularly early money, can have an impact on campaigns. And a talented media consultant should be able to craft some dynamite ads of Wilson embarrasing his district, the Republican Party, and nation given the raw material now available on YouTube. And the national media is going to be a little more interested in running stories about Wilson’s campaign from here on out. And top political campaign staffers are a little more likely to find the race worth investing in. So “maybe” seems about the right answer.

More broadly, I’d suggest that this is indicative of one of the positive effects of new media on American politics. In the old media environment, the zanier members of Congress were good for an occassional soundbite, but beyond that they were backbenchers who kept safe seats because their districts were aligned with their particular brand of crazy. In the new media environment, there is a serious cost associated with their outbursts. In 1999, if an equivalent Congressmember had heckled Clinton in the same way, little would have happened. Political organizations had email lists, but none of the single-issue groups would be activating their membership around this short-run campaign (and if they did, it would be as an organizational fundraising tool, not as a small donor-funnel to the congressional challenger). The Sunday talk shows and 24-hour news networks would have discussed it a bit, but by November 2000 the whole episode would have faded from public memory. In the new media environment, we get more types of activist group, stringing together media artifacts in a wider variety of ways. And several of those new tactics generate money — lots of it. And giving a challenger who was at a 2-to-1 fundraising disadvantage in the last election a 3-to-1 advantage early in this one can indeed make a difference.

This, by definition, can’t happen to every congressperson. It’s a coordination game. It happens only to the most offensive congresspeople — the ones whose words and deeds are so outlandish that they volunteer to be the tactic of opposition ire. If new media is indeed making it easier to sanction the worst actors in congress, it’s hard to see how that’s anything but a public good.

Lawrence Lessig, who is quite nearly my idol, is trying to enlist would-be campaign donors in a strike for change. The idea is that campaign donors will go on strike; we’re not to give money to candidates for federal office until and unless those politicians commit to publicly funded campaigns.

I’ve been thinking about this for awhile now, and I think Brian Hurt over at Enfranchised Mind provides several good arguments to rethink this strategy. Read why he’s not joining Lessig’s strike.

I think his counter-plan–give hugely to opponents, including primary opponents, of the worst examples of that which you oppose–is a good solution. Hurt cites Club for Growth as having particular success with this strategy.

A friend of mine who’s done a lot of work on one particular issue in one state* also recommends this model. With just a few victories over particularly objectionable politicians, he’s had an outsized influence in reshaping the debate around that issue.

While I’m happy to see Lessig trying to reform politics–desperately needed–my other concern is the unfortunate likelihood that this will harm Democratic candidates in the name of small-d democracy. Lessig’s a Dem, I’m a Dem, and I’m concerned he’ll be too persuasive in recruiting other Dems, starving our side in the zero-sum game of 2-party politics.

Empirically, the internet is a better tool for mobilizing Dems than Republicans (Hindman, 2008, pp. 22-26). Small online donations helped put Obama in the White House. The people who are most likely to hear Lessig’s call helped make the 2006 and 2008 elections into big wins for Dems. I’ll bet Karl Rove is happier to see Lessig taking this tack than is Howard Dean.

This is an exciting idea, but I do think Hurt’s Club for Growth model would be far more effective.

*Note how I’m anonymizing my sources; this is a warm-up for my next research project, which will involve a lot of anonymous interviews of policy actors. Are you interested in sharing your experiences as a policy advocate of one sort or another? Please contact me at my gee male account, the first part of which is billdherman.

Text messages may cost you and me $.20 per, but they cost the carriers almost nothing to send, says Srinivasan Keshav, a professor of computer science at the University of Waterloo, in Ontario. Here’s a chunk from the article:

Perhaps the costs for the wireless portion at either end are high — spectrum is finite, after all, and carriers pay dearly for the rights to use it. But text messages are not just tiny; they are also free riders, tucked into what’s called a control channel, space reserved for operation of the wireless network.

That’s why a message is so limited in length: it must not exceed the length of the message used for internal communication between tower and handset to set up a call. The channel uses space whether or not a text message is inserted.

Professor Keshav said that once a carrier invests in the centralized storage equipment — storing a terabyte now costs only $100 and is dropping — and the staff to maintain it, its costs are basically covered. “Operating costs are relatively insensitive to volume,” he said. “It doesn’t cost the carrier much more to transmit a hundred million messages than a million.”

Keshav is no radical with an agenda, either; his research has been funded by one of the four major carriers.

Senator Herb Kohl, Democrat of Wisconsin and the chairman of the Senate antitrust subcommittee, has begun an investigation, only to be effectively stonewalled by carriers.

That texting is radically overpriced relative to carrier costs has been an open secret for years. I’m glad to see Congress looking into it.

Importantly, he talks about the process of policy laundering–negotiating international treaties behind closed doors as a vehicle for passing laws that would be politically unpopular if simply proposed as legislation at the national level.

Robert Reich’s latest book, Supercapitalism, is a fantastic analysis of the current relationship between corporations, citizens, and politics.

I put Supercapitalism on my wish list after Prof. Lawrence Lessig’s glowing recommendation. While I make no pretense of being such a gifted writer as either of these scholars, here I attempt to summarize the book and follow with a few minor points.

Reich, the former Labor Secretary and current Professor of Public Policy at Berkeley, describes us all as being of two minds. On one hand, we are all consumers and (most of us are also) investors. As such, we’re always seeking to minimize our costs and maximize our profits. This leads to lower costs and higher profits; companies that cannot deliver lose customers and investors.

On the other hand, we are also all citizens and employees. In that capacity, we are generally frustrated by the effects of our growing collective power as consumers and investors. Those low prices and high profits squeeze employees, main street family-run stores, and the environment.

Our civic selves object to these negative effects, but we know that our individual purchasing and investing power cannot reverse these trends. Even were we to make the sacrifices of paying higher prices and earning lower returns by supporting more “socially responsible” businesses, we cannot make a difference with our dollars alone. Even social movements calling for corporate responsibility fail because, even if the companies comply, they leave an economic vacuum to be filled by other companies; otherwise, companies just revert to their old ways once the heat is off.

In the “Not Quite Golden Age” of postwar America, companies could pay high wages and CEOs could act on what they saw as the public interest. Most major industries were composed of cozy oligopolies with little product variation. The high cost of industrial production set high barriers to entry, leaving companies with plenty of room to negotiate relatively good deals for employees and the public.

Thanks in large part to new information technologies, as well as the growth of worldwide shipping infrastructure, we have entered what Reich calls supercapitalism over the past 30 years. Companies can design a product on a computer in Denver, buy parts from Brazil, Egypt, and Hungary, and subcontract with a factory in Korea to follow the computerized assembly instructions.

The increasingly fierce competition between companies has led to the squeezing along every part of the supply chain. Main Street retailers can’t sell refrigerators for $1200 when the same icebox is $799 at the big box store 2 miles away. Ford can’t stay profitable by paying its workers $70 per hour in salary and benefits when comparably skilled Koreans will do the same job for half. Suppliers get squeezed, too; ask any of WalMart’s suppliers about this process.

In the era of supercapitalism, companies have little choice but to minimize prices and maximize profits. In the Not Quite Golden Age, a system of cozy oligopolies gave consumers and investors little choice; both groups had mediocre but predictable deals all around. Now, consumers and investors who do not get the best possible deals will take their money elsewhere. Companies that do not ruthlessly squeeze their costs go bankrupt or get bought out.

This process has also led to the corruption of the democratic process. In the ever-accelerating contest for strategic advantage within and between industries, companies have begun to game the system to a degree that was generally not necessary 30 to 50 years ago. Reich’s own experience in government illustrates the impact of the rapid influx of money into the DC area:

Even by the mid-1970s, when I worked there as a political appointee at the Federal Trade Commission, much of the downtown was still run-down. I’d take any lobbyist who insisted on a lunch to a cockroach-infested sandwich shop on the other side of Pennsylvania Avenue, after which I would never see the lobbyist again. But when I returned to Washington in the 1990s, the town had been transformed. … The flow of money had inflated everything in its path. (p. 132)

Corporations are the primary folks funding this influx of capital. NGOs and labor make just a drop in this rapidly growing bucket of lobbyists, PR firms, campaign donations, “expert” consultants, hotels, and fancy restaurants with leather menus and $75 steaks.

Corporations spend this cash in the search for competitive advantages within or between industries. They may not even want to play, but they have to in an attempt to counterbalance other companies’ or industries’ efforts. Competition for customers and investors is too fierce, and one bill can kill a company’s bottom line.

The result is the increasingly impenetrable Beltway we all know and love. Corporate cash has purchased such a cacophany that citizens’ voices are drowned out.

Reich does offer some hope for a cure. Some of the usual suspects are here, from policy changes such as stronger labor protections to procedural reforms such as publicly funded campaigns. The really interesting recommendations, though, center on Reich’s argument against the anthropomorphic view of corporations as people.

Corporations are nothing more than bundles of contracts, so he insists we should neither give them standing to sue to overturn duly enacted laws nor find them criminally liable nor tax their income as though it is the company that owes. Their shareholders and employees would still retain all their rights and responsibilities, which is proper, since a corporation is just a collection of shareholders and employees.

He makes a compelling case for the feasibility and benefits of taxing shareholders instead of companies; corporations would withhold taxes on shareholders’ behalf and give them something like a W-2 form at the end of the year. This would be feasible in the era of computer-processed financial transactions, and it would be progressive, since the wealthiest would pay a higher rate on this income. It would also eliminate corporate inefficiencies caused by some wrinkles in the tax code.

The jaded may initially blow these off as politically impossible (I certainly did), but Reich points out that most companies would rather not be shaken down. A coalition of likeminded corporations helped leverage McCain-Feingold into law, and combined with public pressure, a similar coalition could create even greater reforms.

The prospect for procedural reform in particular is not impossible, but it is quite optimistic. A few industries with a history of winning backdoor negotiations with little effective opposition would fight tooth-and-nail against anything that would reduce their unique power position: oil, telecom, and the entertainment industry all come to mind.

For instance, he perpetuates the mistaken notion that the net neutrality debate was just another contest between corporate interests. In fact, tech companies were seriously outmatched on The Hill, and it was only due to the outstanding work by NGOs such as Free Press and the mobilization of over 1 million citizens that Sen. Ted Stevens’ (R-AK) 2006 telecom bill died as a net neutrality hostage.

Additionally, Reich regrettably fails to consider the potentially obstructionist role of the corporate media in blocking political reforms. The media have an obvious economic incentive to keep campaign funding the way it is: teeming with corporate cash that winds up buying tons of ads for several months every two years.

Any attempt to tie campaigns’ spending to taxpayers’ willingness to pay would generate substantial media opposition, and a bill mandating free airtime would drive media companies to break out every political tool they have. Congress speaks to its constituents through the media; these same media will turn on them (even if not as overtly as, say, Fox) in a heartbeat, and politicians know that.

Finally, Supercapitalism could better integrate theory generally and political economy more specifically. This is ironic; the book is itself an excellent introduction to political economic analysis. But theories about the flow of political information (such as Oscar Gandy’s theory of information subsidies) and the policymaking process (perhaps Baumgartner and Jones’ theory of punctuated equilibriums) could add some heft to Reich’s analysis. This is clearly a trade press book, but it is not impossible to drag a little theory into a book with wide appeal. Paul Krugman’s highly readable book, The Age of Diminished Expectations, is a fine example, and he was using economic theory.

All told, though, Reich’s book is nothing less than a beacon of hope in a world of dark political realities. This should be on your must-read list, and I’m already thinking about how I could use it in the classroom.

In my last report on this story, I put little thought into a minilink to an article by CNet’s Anne Broache, which frets that proposed net neutrality bills probably would not prevent Comcast’s ongoing peer-to-peer blockade. I no longer agree; I think even the weaker of the two bills on this count, if properly enforced (big caveat), would stand a good chance to stop these shenanigans.

This further investigation was sparked when I learned a good deal more from this awesome EFF article about the Comcast affair. This looks like a tight case: Comcast is almost completely obstructing Gnutella and BitTorrent traffic, and when confronted with effects on other programs (specifically, Lotus Notes and Windows Remote Desktop) has changed their algorithms to let that traffic through.

Thus inspired, I re-read the bill now in the Senate, Byron Dorgan and Olympia Snowe’s S. 215. I also re-examined Ed Markey’s bill from last year. Having done so, I’ve changed my mind: I think the plain text of the Senate bill and any reasonable reading of the House bill (pending FCC interpretation) makes it pretty hard for Comcast to continue blocking specific programs.

I start with the Senate bill which, unlike Markey’s proposal, has already been re-introduced in this Congress. Section 12(a) states, “With respect to any broadband service offered to the public, each broadband service provider shall (1) not block, interfere with, discriminate against, impair, or degrade the ability of any person to use a broadband service to access, use, send, post, receive, or offer any lawful content, application, or service made available via the Internet.”

This seems straightforward: BitTorrent and Gnutella have legal uses, thus Comcast would be prohibited from impairing or even degrading their subscribers’ uses of these programs. They could slow down the traffic to and from their heaviest users; EFF points out that they’re already doing this. But they couldn’t block specific programs just because some of their users are bandwidth hogs and some of their content is illegal. (A large share of HTTP is illegal, too, but Firefox is both legal and unencumbered.)

Broache and the experts she cites (including the very awesome Harold Feld of the Media Access Project) express concern that the Markey version in particular leaves a big enough gap to allow some potential for such a p2p blockade to stand. Let’s go to the tape.

In Section 4(b), we find:

EXCEPTIONS.—Nothing in this section shall prohibit a broadband network provider from implementing reasonable and nondiscriminatory measures to (1) manage the functioning of its network, on a systemwide basis, provided that any such management function does not result in discrimination between content, applications, or services offered by the provider and unaffiliated providers.

This is flawed and open to interpretation. If the period comes after “services” the exemption is airtight. You can manage bits however you want, but don’t pick and choose winners from losers. As it stands, though, I still think Comcast is almost without a leg to stand on.

First, Comcast is definitely in a business that competes with BitTorrent–namely, the cable television business. BT is largely a means of acquiring video; at least in terms of total bandwidth traffic (important when evaluating the rhetoric of network management), video is surely the lion’s share of BT usage.

Second, Comcast’s current efforts are neither reasonable nor nondiscriminatory. They’re effectively blocking all users from seeding any files regardless of current network congestion or usage patterns, which is unreasonable when they could provide much better overall traffic management by adjusting it to reflect congestion and each user’s bandwidth greed. (See the EFF link above.) And they’re blocking some bidirectional filesharing programs (BT, Gnutella) but not others (LotusNotes), which is clearly discriminatory.

Markey’s 2006 version is indeed not as tight as the Dorgan-Snowe version in the Senate. Dorgan’s network management exception requires that all decisions not be inconsistent with the mandated nondiscrimination provisions, including the requirement that the provider not pick and choose winners among applications and content. This is an important distinction. Under Dorgan, network management must be done without resorting to picking off specific applications. Under Markey, though, it simply must be “reasonable and nondiscriminatory,” which probably means something different to Michael Copps than Michael Powell.

Two more points are worth mentioning. First, any regulation is surely a substantial disincentive for Comcast to try something so boldly against specific applications. The marginal value of choosing this over choosing more sensible (and cost effective) traffic management is greatly diminished in the face of even a potential drawn-out, multi-venue legal proceeding. Thus, even if the bill does not force the FCC’s hand here, Comcast would never know how it would play out, especially in light of massive political pressure, so they would pick something safer, which means less discriminatory.

Second, both bills require providers to disclose all limitations on broadband networks. Comcast won’t want to publicly admit that they’re doing this; they’ve dragged their feet on doing so before finally chalking it up to “network management”. If they had to disclose it, this would dissuade them from doing it in the first place.

Of course, they could still do it and try to hide it, but they would surely realize this makes any necessary FCC proceeding even more likely to come out against them. They’d have a much harder time explaining it as mere network management if they were hiding it from their customers.

Either Markey’s or Dorgan and Snowe’s bill probably does the job, but the Senate version is the better of the two.